Higher thermostat temperatures result in lower emissions and less cylinder wear for longer engine life. Your engine is too hot only once the cooling system starts to boil. Most cooling systems are at 12-16 psi and the boiling temperature of coolant at that pressure can be as high as 260 degrees. If the water flashes to steam, the engine will overheat because steam has poor heat conduction properties and wont be able to draw heat away from the cylinder fast enough. You can't just run your engine at 260 degrees to reduce liner wear, though. The 260 degrees you thermostat sees is kind of an average of the temperature of the coolant coming out of the enigne. Within the engine, there are going to be localized spots that are 20-50+ degrees hotter than the temperature the thermostat sees. In order to prevent localized boiling, a safety margin of thermostat temperature needs to exist. The GM engineers decided 195 for a small block chevy. The newer 210 degree engines run some fancy reverse flow direction cooling systems that make them more compatible with the higher temperatures. Though, the last of the 5.7L truck engines were standard flow and I believe they ran 210 degrees.